What is termination for Just Cause?
Employers are legally entitled to terminate employees for "just cause" (i.e. without notice or severance) for certain types of bad behaviour.
What should our company know about just cause terminations?
At the outset, there are three very important things to understand about terminations for just cause. First, if you terminate an employee for just cause, you should expect that your company will be sued for wrongful dismissal. For that reason, we advise employers to always seek legal advice before terminating an employee for cause.
Second, courts do not like terminations for just cause. It has been considered the "capital punishment" in employment law, because it is extremely harsh and reserved for the worst offenders. Therefore, employers must act accordingly.
Third, courts take a default view that all terminations are without cause. To overcome this, employers must be able to prove in court that the misbehaviour in question "struck at the very heart of the employment relationship, thereby giving rise to its breakdown". Providing evidence of the bad behaviour is extremely important - employers should always document everything and keep records of all misconduct and all discipline.
How does an employer "build a case" for just cause?
Two words: document and discipline.
First, document to prove the specifics of the misconduct, and to establish a pattern of bad behaviour. Misconduct of the same type is much more compelling than isolated, unrelated incidents. The documentation should be as specific as possible, including dates, times, names, witness reports, and discipline exacted. All documentation of employee misconduct should be kept on file.
Second, discipline for all instances of misconduct. The purpose of discipline is to warn the employee that his or her job is at risk, and to give the employee multiple opportunities to improve.
Do you always need to "build a case"?
No. Sometimes, the misconduct is so severe that the employer is justified in terminating for cause upon first learning of it. However, generally speaking, the evidence must still establish a pattern of misconduct of a similar nature. For instance, habitually dishonest or disloyal employees tend to keep their misconduct hidden from their employers. In some cases, the employer learns everything at once. It would be unreasonable to expect the employer to repeatedly discipline employees for misconduct that was deliberately concealed.
How do I know if the bad behaviour establishes "just cause"?
It is difficult to provide any hard and fast rules, but the vast majority of just cause terminations involve some sort of repeated wilful misconduct. Context is always key. For instance, courts might consider the employee's length of service, prior misconduct, surrounding circumstances, remorse, whether misconduct could be characterized as a "lapse in judgment", and the employee's specific duties and responsibilities.
What are examples of just cause terminations?
In Dunsmuir v Royal Group Inc., the court upheld a termination for just cause of a Senior Vice-President who failed to prevent or report the misconduct of other employees. The court held that he had breached the fiduciary duty associated with his senior role. The misconduct included: (1) Failing to prevent or report a scheme where shareholders and officers of the employer bought property and then "flipped" the property to the corporation, at a $6.5 million markup; (2) Failing to prevent or report a "cover-up" of the reason why management bonuses were greater than what was provided for in the applicable bonus plan; (3) Failing to prevent or report the fact that the Canada Revenue Agency was misled about these bonuses (to reduce management's tax liability).
In Shakur v Mitchell Plastics, the court overturned a termination for just cause of an employee who slapped a co-worker in the face hard enough to cause redness. The court placed emphasis on the fact that this was a first offence, that preventing workplace violence is a "shared responsibility", and that the employer did nothing to train its employees in workplace violence and harassment.
The law on just cause termination is not always intuitive. No one should reach any conclusions about a just cause termination without input from an experienced employment lawyer.
What can Hyde HR Law do for my company?
The lawyers at Hyde HR Law are experts in just cause terminations. We give our clients specialized advice on "building a case" against misbehaving employees; we evaluate the strengths and weaknesses of just cause terminations; and we vigorously defend employers in legal proceedings arising out of just cause terminations. We have helped our employer clients execute and resolve countless just cause terminations. Contact us today.